"The second principle I would like to see in the emerging plan from the Treasury and the Fed is that our approach should be one of mutual responsibility and reciprocity. It must not be designed to reward particular companies or the irresponsible decisions of borrowers or lenders. It must not be designed to enhance the personal gain of CEOs and management.This is nothing but populist boilerplate.
The recklessness of some of these executives has helped cause this mess, even as they walk away with multi-million dollar golden parachutes while taxpayers are left holding the bag. As taxpayers are asked to take extraordinary steps to protect our financial system, it is only appropriate that those who benefit be expected to contribute to the protection of American homeowners and the American economy. Just as support is not designed to payoff egregious executive compensation, it should not reward those who are ruthlessly foreclosing on American families."
All variations of the plan call for the government to buy debt that investors or borrowers no longer want or can't service. How that could be anything other than a reward for irresponsible decisions, it is impossible to say. All this caused through no one's fault (but the 'greedy' Wall Street crowd and those "ruthlessly foreclosing")? Ridiculous.
Observe whom he pointedly leaves out: the politicians themselves.
Thanks to the creation and favored treatment of Fannie and Freddie, the CRA, the Tax Act Reform of 1986, and a host of other legislation, the mortgage lending market was severely distorted. Self-limiting free-market mechanisms that constrain bad investment decisions was thus removed. The Fed greased the wheels, and put the whole train on a roller coaster, through a years-long policy of artificial manipulation of interest rates.
(This is not to mention the ample funds Obama himself received from Fannie and Freddie. However, even at #2 on the list of recipients, $135,000 over three years isn't enough to make the case that he was bought, as is common currency on conservative blogs. It's chump change and a tiny percentage of the $150 million those two paid to politicians over the years.)
Granted, Barack Obama had nothing to do with any of that legislation, or with blocking more useful legislation that would have reined in Freddie and Fannie in 2003-2005. That's one of the reasons he is the least culpable of the major public figures in this debacle. As usual, he was just along for the ride.
He does get low marks however for more lying, such as this:
In recent years, I have outlined plans that would have helped prevent the problems we now face, and yesterday I proposed the outlines of a plan that would establish a more stable and permanent solution to strengthen our financial system."In recent years"? I read a lot of newspapers and blogs around the political compass daily. I haven't seen his plan. If he ever proposed any such thing, I'm guessing he outlined it to his kids over breakfast and it never went any farther.
Or, perhaps he is referring to the community organizing (translation: "leftist agitation") he did in concert with ACORN, one of the villains behind pushing politically correct lending of the sort that is part of the current problem.
No, I've yet to see any "outline of a plan that would establish" any kind of solution, much less one whose outcome would "strengthen our financial system." Given that he knows absolutely nothing about capitalist economics or how markets actually work, the very idea is inconceivable.
Maybe he thinks this is part of a plan:
Third, this plan must be temporary and coupled with tough new oversight and regulations of our financial institutions, and there must be a clear process to wind down this plan and restore private sector assets into private sector hands after restoring stability to the system.Right. Now, I don't drink much, so maybe more of the hair of the dog that bit you will cure hangovers, I don't know. But more regulation, which created conditions that caused the problem in the first place, surely will not cure this financial hangover. Best just to let nature take its course. I will give him two cheers for at least recognizing that private property should be returned to private citizens, after the government is finished with it.
Saving the best for last, we have this doozy:
Fourth, this plan should be part of a globally coordinated effort with our partners in the G-20. This is a worldwide issue, and while the United States can and will lead in stabilizing the credit markets, we should ask other nations, who share in this crisis, to be part of the solution as well.Typical of Obama. U.S. self-defense at risk? Go to the U.N. American financial markets threatened? Coordinate with a non-existent body (there is a G-8, but if there is a G-20 they must meet in secret) and get them to buy in. Since heavy-handed U.S. regulation set the stage for this debacle, adding the outright socialist ideas of Europe surely cannot help.
Finally, to excuse his lack of offering any ideas, he says this:
Finally, given the gravity of this situation, and based on conversations I have had with both Secretary Paulson and Chairman Bernanke, I will refrain from presenting a more detailed blue-print of how an immediate plan might be structured until I can fully review the details of the plan proposed by the Treasury and the Federal Reserve.Congress is right now engaged in hashing out a plan with the Executive branch of government. Barack Obama is the senator from Illinois, a major center of U.S. finance. He is also running for an office that will have a new occupant in four months. Shouldn't he be doing exactly that, offering "detailed blueprints?"
Based on the ideas quoted above, the answer would have to be "No."